The number of houses built in the South East could plummet because of government plans to allow councils to retain business rates created by new developments, experts warn.
Under the proposals, which will be introduced as a clause in the Local Government Bill this week, business rates generated by new developments will no longer go into a central government pool.
This should spur councils to pass planning consents for high-density commercial schemes.
But London First’s property director, Judith Salomon, said the changes “could act as a disincentive for residential developments” as housing would provide no immediate cash benefit to councils.
Tony Carey, managing director of St George, said: “It looks set to encourage offices and light industrial rather than mixed-use schemes.”
References: EGi News 07/03/03
